Human Resource Economics and Public Policy: Essays in Honor of Vernon M. Briggs Jr

By Charles J. Whalen | Go to book overview

11
Sectoral Approaches to
Workforce Development
Toward an Effective U.S. Labor-Market Policy

Robert W. Glover
Christopher T. King
The University of Texas at Austin

Labor-market policies refer to government interventions to support and improve labor-market operations for workers and employers. All major industrialized nations have some form of labor-market policy, but such policies differ widely in design, size and scope, and implementation.

Economists generally distinguish between active and passive labormarket policies (Kletzer and Koch 2004), and nations typically offer a mix of active and passive policy elements. Active labor-market policies include five types of activity: job matching and job search assistance (such as public employment services), enhancing the supply of labor (e.g., training), reducing labor supply (by means such as encouraging early retirement or prorating unemployment benefits to accommodate reduced work weeks), creating stronger labor demand (e.g., through public works or public service employment), and changing the structure of demand (e.g., by the use of employment subsidies) (Auer, Efendioglu, and Leschke 2008). An example of a passive policy is a program that extends or expands unemployment insurance. Active labor-market policies have also been called “selective labor-market policies” to distinguish them from macroeconomic policies and to emphasize their targeted nature (Marshall 1984). Sweden and other European nations, as well as a few Asian countries, provide examples of countries that have long pursued labor-market policies emphasizing active elements,

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